USPTO boss: IBM bathroom patent symbolic of US patent ills

The head of the USPTO today talked about the rise of bad patents (reserving a …

On August 14, 2000, IBM filed a patent on "an apparatus, system, and method for providing reservations for restroom use." That's right; Big Blue wanted a patent on taking a number to use the can. That patent, which was eventually retracted by the company, caught the attention of top officials at the US Patent and Trademark Office, including Jon Dudas, the USPTO's current director, because it in many ways is symptomatic of the problems facing his office. At a talk today at the Tech Policy Summit in Hollywood, Dudas shed some light on why companies file such patents in the first place, and what his office hopes to do about it.

IBM, who Dudas only referred to as a "Fortune 10 company," is routinely at or near the top of the heap when it comes to number of US patents obtained in a given year. While companies generally want patents in order to protect intellectual property, that's not the only reason for seeking patents. Dudas noted that Wall Street loves it when companies file patents, since patent numbers can be used as an easy proxy for innovation and R&D work. The sheer number of patents can also make it easier to strike cross-licensing agreements with other companies, as it makes a given patent portfolio look broader and stronger.

These things don't "promote innovation," as Dudas noted, but they do make increasing economic sense for many businesses. The result has been predictable; a surge in bad applications. Over the last 40 years, the USPTO granted 62-72 percent of all patent applications, but that number has been dropping. In the first quarter of this year, only 43 percent of applications have been granted.

Big Blue wants to help
you use the john

Because the patent office has to give equal treatment to "any application that comes in the door"—even if it's about airline bathroom reservation systems—that means that more than half of patent examiners' labor is now being expended on patent applications that don't measure up. When your office looks at more than 500,000 patents a year, that's a lot of time and money spent evaluating flawed applications.

The problem might be fixed by raising the barrier to filing an application, possibly by raising the price (one government officials proposed a $50,000 fee per application), but the USPTO has a mission to be open to all inventors. Currently, it charges either $500 or $1,000 to file an app, even though it costs the patent office $4,200 to evaluate each patent (the subsidy comes from maintenance fees paid by current patent holders).

Dudas wants to see the barrier to filing raised in less costly ways, such as requiring minimal searching for similar or identical previous patents, and he wants applicants to describe exactly how their invention expands the state of the art; in other words, make a strong argument that your idea is demonstrably better than what's already out there. These changes alone will "drop out a significant portion of bad applications."

Jon Dudas

While the USPTO comes in for plenty of criticism in technology circles for software patents, business methods patents, and more, Dudas defended his office's initiatives. While a "one-world patent" is still a long ways off, the US does have accelerated examination agreements in place with countries like Japan, Canada, and the UK, and is working on similar initiatives in China (the world's third-largest patent office). It has also launched an accelerated exam process here in the US, where companies can choose to put specific applications on a fast-track process that guarantees a ruling in under a year. By requiring companies to pick and choose which patents they file this way, some of the dross is filtered from the process, and approvals are far higher than they are for the regular review process.

We've been covering the proposed patent reform legislation extensively here at Ars as it wends its ways through the legislative process, in large part because of how important intellectual property issues have become to the tech sector. And it's not just tech; Dudas estimates that US intellectual property is now worth $5.5 trillion and accounts for nearly 70 percent of corporate assets.

Will the reform bill pass? Though generally unwilling to make positive predictions on legislation, Dudas does believe that the bill has more than a 50 percent chance of passing during this session of Congress, and it could come up for a vote within the next few weeks.

Perhaps the bigger question is whether the reform bill will actually change much. While there are plenty of changes to like, the bill alone won't clean up America's patent problems... but it could rein in venue shopping, submarine patents, and outrageous damage awards. Sounds like a start.